The Chancellor has today announced welcome major changes to the Job Support Scheme (JSS). The changes mean the scheme is likely to be worth considering for many more employers.
For businesses in all areas of the UK that are still permitted to open but are impacted by coronavirus (COVID-19):
- Employees will only have to work a minimum of 20% of normal hours (down from the former 33% minimum) which are fully paid for by employers.
- Employers will only have to pay 5% of wages for hours not worked (reduced from 33%).
- The government will provide up to 61.67% of wages for hours not worked (increased from 33%), capped at £1541.75 per month (increased from £697.92 under the previous rules).
The employer still has to pay employer NICs and auto enrolment contributions on the total amount.
This means that an employee who works 20% of their normal hours (and whose normal salary is under £3,125 per month) will receive at least 73% of their pay.
Example: an employee who normally earns £250 per week.
- Under the Jobs Support Scheme, they work 20% of their normal hours.
- They earn £50 from the employer for the hours worked.
- They employer contributes £10 for the unworked hours.
- The government contributes £124 for the unworked hours.
- They receive £184 per week in total, which is 73% of full pay a month.
There is no change to JSS where businesses are legally forced to close due to coronavirus (COVID-19) restrictions:
- The Government will pay 67% of employees’ wages up to £2100 per month.
- Employers pay nothing towards wages (but have to pay employer NICs and auto enrolment contributions).
For advice on what these changes could mean for your business, please contact our Employment team.